Business Education ETS 176 – Flashcards
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Bond
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A promise to pay a sum of money by a certain day or after a certain condition. Contracts and Loan Agreements.
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Corporate Bonds
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Bonds issued by a firm, not by a government or a municipality.
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IPO
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Initial Public Offering. A stock or bond sold by a corporation for the first time. Proceeds (money from sale) may be used to retire debts, build new plants or buy new equipment or for additional working capital.
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Debenture Bond
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Bonds that are unsecured (i.e., not backed by any collateral such as equipment).
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Equity Financing
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Funding that comes from the business owners contributing capital to buy "shares" of the company. In return for the shares of the company the contributor gains a percentage of the profit.
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Texas right-to-work law
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A person cannot be denied employment because of membership or non-membership in a labor union or other labor organization.
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Comparative Advantage
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Concept in economics that a country should specialize in producing and exporting only those goods and services which it can produce more efficiently (at lower opportunity cost) than other goods and services (which it should import).
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OSHA
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Occupational Safety and Health Administration. A government agency in the Department of Labor intended to assure safe and healthful working conditions for working men and women by setting and enforcing standards and providing training, outreach, education and assistance.
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Revenue
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The income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted.
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Matching Rule
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The duty of an accountant to try to place an income transaction with an expense transaction.
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Historical Cost
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Original cost of an asset, as it is recorded in the books of a firm.
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Time Value of Money
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Price put on the time an investor or lender has to wait until the investment or loan is fully recouped. TVM is based on the concept that money received earlier is worth more than the same amount of money received later, because it can be 'employed' to earn interest over time. Computed as compound interest.
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Risk
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A probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action.
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Sole Proprietorship
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A type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. Its equity would typically consist of a single owner's capital account.
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Partnership
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Business owned by more than one person. They pool money, skills, and other resources, and share profit and loss in accordance with terms of the partnership agreement. With its equity consisting of separate capital accounts for each partner.
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Corporation
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Owned by their stockholders (shareholders) who share in profits and losses generated through the firm's operations, and have three distinct characteristics (1) Legal existence, (2) Limited liability, and (3) Continuity of existence. The total owners' equity (i.e., "stockholders' equity") of a corporation usually consists of several amounts, generally corresponding to the owner investments in the capital stock (by shareholders) and additional amounts generated through earnings that have not been paid out to shareholders as dividends (dividends are distributions to shareholders as a return on their investment). Earnings give rise to increases in retained earnings, while dividends (and losses) cause decreases.
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Franchise
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A form of business organization in which a firm which already has a successful product or service (the franchisor) enters into a continuing contractual relationship with other businesses (franchisees) operating under the franchisor's trade name and usually with the franchisor's guidance, in exchange for a fee.
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Functions of Management
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Planning, Organizing, Leading, and Controlling
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EEOC
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The US Equal Employment Opportunity Commission. Enforces federal laws that make it illegal to discriminate against a job applicant or an employee because of the persons race, color, religion, sex (including pregnancy), national origin, age, disability or genetic information.
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COBOL
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Common Business Oriented Language. Developed for programming Business Data. The oldest programming language.
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BASIC
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Beginners all-purpose Symbolic Instruction Code): Popular programming language, easy to learn.
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FORTRAN
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Formula Translation. A high-level programing language for mathematical and scientific purposes.
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JAVA
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A simple platform-independent object-oriented programming language used for writing applets that are downloaded from the World Wide Web by a client and run on the client's machine.
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AAUW
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American Association of University Women): a nationwide network that works for the advancement of equity for women and girls through advocacy, education, philanthropy, and research.
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NBEA
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National Business Education Association. Professional organization devoted exclusively to serving individuals and groups engaged in instruction, administration, research, and dissemination of information for and about business.
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Balancing
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verifying all the transactions on your account to make certain your records match the bank.
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Financial Statement
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A written report of the financial condition of a firm. Includes balance sheet, income statement, statement of changes in net worth and statement of cash flow.
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Income Statement
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A financial document that shows how much money (revenues) came in and how much money (expenses) was paid out.
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Sales
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The gross revenue generated from the sale of something less returns (cancellations) and allowances (reduction in price for discounts taken by customers).
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Gross Profit
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The amount of direct profit associated with the actual manufacturing of the item sold. Calculated as sales less the cost of goods sold.
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Fixed Assets
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Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time.
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Owner's Equity
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Amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities
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Footing
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The total of the debit column or credit column of an account.
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Journalizing
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The process of recording business transactions in a journal. Generally includes date, ledger account to be debited and amount, ledger account to be credited and amount, description and cross-reference to the general ledger.
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Posting
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Process of transferring debit and credit amounts from journals to the ledgers
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Ledger
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A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place.
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Mutual Agency
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Right of all partners in a partnership to act as agents for the normal business operations of the partnership, and their responsibility for their partners business related (but not personal) actions.
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BPA
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Business Professionals of America. The leading career technical student organization for students pursuing careers in business management, office administration, information technology and other related career fields.
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FBLA
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Future Business Leaders of America. Future Business Leaders of America.
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SIEC/ISBE
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La Societe Internationale pour l'Enseignement Commercial/ The International Society for Business Education. A professional organization promoting education about business for students at all levels of the educational spectrum. Provide a network to promote international business education.
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ACTE
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Association for Career and Technical Education. National education association dedicated to the advancement of education that prepares youth and adults for careers.
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Trade Bloc
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A group of countries that work together to promote trade with one another.
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NAFTA
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North American Free Trade Agreement. An agreement to remove most barriers to trade and investment among the United States, Canada, and Mexico.
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Free Trade
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International trade, free of government interference
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Trade Barriers
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A block in international trade put in place by the government.
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Wage Rate
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Compensation workers receive in exchange for their labor per unit time - the price of labor. Usually calculated as dollars paid times hours worked. Prevailing pay scale for work performed in an occupation.
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Employment-at-will
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A common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless a contract specifies otherwise.
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Administrative Law
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The body of law created by administrative agencies (in the form of rules, regulations, orders, and decisions) in order to carry out their duties and responsibilities.
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Implied Covenant
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A promise that the employer and the employee will be fair in their dealings with each other.
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Common Law
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System of law that is the same for all people, based on court decisions that have become accepted legal principles.
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Constitutional Law
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System of law that is the same for all people, based on court decisions that have become accepted legal principles.
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Legislative Law
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Law created by lawmaking bodies such as Congress and state assemblies. Also called statutory law.
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Bait and Switch
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First, customers are "baited" by merchants' advertising products or services at a low price, but when customers visit the store, they discover that the advertised goods are not available, or the customers are pressured by sales people to consider similar, but higher priced items.
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Capital
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Wealth in the form of money or property owned by a person or business and human resources of economic value.
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Matrix Organization
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It is a type of organizational management in which people with similar skills are pooled for work assignments, resulting in more than one manager.
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Hierarchical Organization
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The arrangement is formed into a hierarchy. In an organization, the hierarchy usually consists of a singular/group of power at the top with subsequent levels of power beneath them.
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Flat Organization
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An organizational structure with few or no levels of intervening management between staff and managers. The idea is that well-trained workers will be more productive when they are more directly involved in the decision making process, rather than closely supervised by many layers of management.
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Which of the following actions could a new company take to obtain equity financing for growth? A. Issue corporate bonds. B. Hold an initial public offering (IPO) of stock. C. Purchase debenture bonds. D. Secure a low-interest loan from a lending institution.
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B. Hold an initial public offering (IPO) of stock.
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Which of the following best exemplifies a manager who adheres to McGregor's Theory Y of management? A. Ms. Sanchez meets with her staff often and listens to their advice when making decisions. B. Ms. Doe rewards staff members who adjust to her leadership style with bonuses and special perks. C. Ms. Jones has her employees elect a coworker each month to be recognized for distinction. D. Ms. Travis organizes her office so staff members follow her rigid and detailed instructions.
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A. Ms. Sanchez meets with her staff often and listens to their advice when making decisions.
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Which of the following best describes an important feature of the Texas right-to- work law? A. Employers must make reasonable accommodations for disabled employees. B. Employees are permitted to work at a unionized company without joining the union. C. Employers must pay equal wages to men and women who perform similar jobs. D. Employees are guaranteed a wage that allows them to meet their cost- of-living needs.
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B. Employees are permitted to work at a unionized company without joining the union.
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Which of the following is an example of unethical business behavior? A. An automobile dealership offers a 20% discount to a delivery company purchasing several new vans. B. A medical doctor accepts samples from a pharmaceutical sales representative. C. An auto repair mechanic exaggerates the need for repairs on a customer's vehicle. D. An electronics company creates an advertisement that highlights weaknesses in a competitor's television.
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C. An auto repair mechanic exaggerates the need for repairs on a customer's vehicle.
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Mark agrees to buy a used car from Eliza for $8500. In order for this business contract to be legally binding, which of the following conditions will have to be met? A. Mark must pay Eliza the full price upon taking possession of the car. B. Both parties must reside in the same state. C. The agreement must be in writing and signed by both parties. D. The transaction must take place within 90 days of the agreement.
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C. The agreement must be in writing and signed by both parties.
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In which of the following situations does the Occupational Safety and Health Act protect workers from disciplinary action if they refuse to perform a job due to workplace hazards? A. The workers' concerns have been verified by the Occupational Safety and Health Administration. B. The workers have been informed by fellow employees that possibly dangerous working conditions exist. C. The workers have filed a complaint with the Occupational Safety and Health Administration. D. The workers believe in good faith that they are in imminent danger and have informed their employer.
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D. The workers believe in good faith that they are in imminent danger and have informed their employer.
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According to the principle of comparative advantage, nations engaged in international commerce will achieve the greatest success by: A. Specializing in production activities for which their opportunity costs are lowest. B. Maximizing production of goods for which there is extensive world demand. C. Specializing in production activities, which enable them to benefit from economies of scale. D. Maximizing production of goods, which can be shipped quickly and inexpensively.
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A. Specializing in production activities for which their opportunity costs are lowest.
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Which of the following is the primary advantage of using desktop publishing software instead of word processing software to produce business documents? A. Desktop publishing software enables the user to create documents that retain their formatting and graphic features on all platforms. B. Desktop publishing software allows the user to record macros that simplify difficult or repetitive operations. C. Desktop publishing software facilitates the creation of more complex page layouts containing text and graphics. D. Desktop publishing software allows the user to cut and paste graphics from one computer utility into another.
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C. Desktop publishing software facilitates the creation of more complex page layouts containing text and graphics.
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Adding forms to a Web page will allow the page to: A. Collect data input by the end user. B. Display animations and real-time video. C. Appear the same across all computer platforms. D. Download and play background music.
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A. Collect data input by the end user.
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A businessperson would like to produce a printed report in which business data are presented in several different graphs and a marketing strategy is proposed and described. Which of the following would be the most appropriate way to complete this task? A. Producing the graphs with a photo editor and importing them into a multimedia program B. Creating the graphs with a spreadsheet program and importing them into a word processing document C. Designing the graphs with a paint- and-draw program and pasting them into a text editor D. Entering the data into a relational database and exporting the data into an object-oriented programming language
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B. Creating the graphs with a spreadsheet program and importing them into a word processing document
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A high level of knowledge and skill associated with using sophisticated database management software is likely to be most important for an understanding of which of the following business systems? A. Automated accounting system B. Data encryption system C. Marketing information system D. Office automation system
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C. Marketing information system
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In designing a database of customer information, a company is considering what kind of data it would like to be able to retrieve from the database. This decision is most important for determining the: A. Size of the entire database. B. Number of fields to have in the database. C. Syntax of the query language. D. Style of interface between the database and the end user.
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B. Number of fields to have in the database.
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In developing a security policy for a company's computer system, which of the following steps should be taken first? A. Contacting the manufacturers of the computer system components for information about security issues B. Creating a plan of action for recovering data lost through theft, fire, or equipment failure C. Identifying critical information and assessing potential threats to the information D. Identifying the types of hardware and software that could be pur- chased to protect the system from threats
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C. Identifying critical information and assessing potential threats to the information
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A high school student is enrolled in a work-based learning program in which he is involved in interpreting a company's financial reports. His accounting teacher is planning a unit in which students will be given a general ledger from a fictitious company. Which of the following class- room activities would best connect the accounting lesson to the student's work- based learning experiences? A. Transferring the balance of all temporary accounts to the capital account B. Calculating tax liabilities and completing tax liability payment coupons C. Comparing net income to revenue and comparing current assets to current liabilities D. Determining the equality of all debit and credit accounts in the general ledger
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C. Comparing net income to revenue and comparing current assets to current liabilities
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Jamal is trying to decide whether or not his company needs a new, larger computer system. Which of the following would be the most appropriate first step for Jamal to take in making this decision? A. Soliciting feedback from employees about the type of system they think the company should have B. Defining the types of problems the new system would need to solve C. Determining the cost of purchasing and installing a new computer system D. Comparing the features of different types of computer systems
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B. Defining the types of problems the new system would need to solve
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Which of the following best describes the primary role of the faculty advisor to a student business organization? A. To instruct students about contemporary issues in the business world. B. To guide students and help them take ownership of the organization. C. To maintain records and monitor the financial activities of the organization. D. To help participating students locate and secure part-time jobs.
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B. To guide students and help them take ownership of the organization.
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Which of the following types of investments is likely to be most appropriate for an individual who has a very low tolerance for risk? A. U.S. treasury bonds B. Corporate bonds C. Mutual stock funds D. Growth company stocks
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A. U.S. Treasury Bonds Since U.S. treasury bonds are issued by the federal government, they are almost completely free of risk. The potential interest to be earned on treasury bonds is higher than the potential interest to be earned on a savings account from a bank, yet not as high as the potential interest to be earned on stocks or mutual funds. The main attraction to U.S. treasury bonds is that they are considered to be very low risk.
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Which of the following is most likely to help ensure that important topics are covered in a timely fashion during a business meeting? A. Ask each participant to limit individual comments to less than five minutes. B. Use parliamentary procedures to conduct, organize, and structure the meeting. C. Invite people to the meeting that have demonstrated expertise in the topics being covered. D. Provide each participant with an agenda that is used for conducting the meeting.
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D. Provide each participant with an agenda that is used for conducting the meeting. Preparing a meeting agenda is important so that meeting participants will know the direction of the meeting in advance. The agenda should include topics, a schedule, the names of the participants, and resources and should be prepared early enough to give participants adequate time to prepare their thoughts on each topic. An agenda will help keep meeting participants on task.
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EIN
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EIN stands for employee identification number, also called the federal tax ID number. It is the nine-digit number the Internal Revenue Service (IRS) assigns to a business. This number identifies a specific business, just like a social security number identifies a specific individual, and tells the IRS that this owner is required to file various business tax returns monthly, quarterly and annually. The business owner can obtain an EIN online at the Internal Revenue Service web site, www.irs.gov, or by mail or telephone. Before the owner can file any tax returns, the business must have an EIN.
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The IRS requires an EIN if the business:
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• Has Employees • Is a corporation or a partnership • Is required to pay employment, excise, alcohol, tobacco or firearms taxes • Withholds taxes on income paid to a non-resident alien • Has a Keogh retirement plan • Involes trusts, estates, real estate, mortgage investments, non-profit farmers' cooperatives or plan administrators If a business owner is unsure whether he needs an EIN, he should consult an accountant for advice.
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Independent Contractor
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A self-employed individual who performs a service for a client. The client is required to report earnings of $600 or more in one year to the Internal Revenue Service (IRS), and provide the independent contractor with a 1099 by January 31st. An independent contractor works on his own time frame, uses his own equipment, hires and compensates any additional people required to complete the job, and is usually paid on a per job or per piece rate. The contractor and the client may have a contractual agreement that states each party's responsibilities.
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When a person is classified as an independent contractor, the hiring company avoids:
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•Withholding federal and state income taxes. •Paying the employer's portion of Social Security and Medicare taxes. •Paying federal and state unemployment insurance premiums. •State disability insurance premiums and workers' compensation costs. •Providing any fringe benefits. •Liability for negligence or EEOC non-compliance by the contractor.
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Sales Tax
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a levy placed on the retail price of merchandise and services sold to the public. The state legislature determines what merchandise and services are levied and determines the percentage of the sale price each business must collect, e.g. 8.25%. Sales taxes are collected by the comptroller's office. Cities and counties may also have sales tax requirements. They are set by the city council and elected county officials. These sales tax payments are made to the tax assessor collector's office. Depending upon the amount of money collected, sales tax is paid on a monthly, quarterly or annual basis. The business or person collecting sales tax must apply for and receive a sales tax permit from the state prior to charging and collecting sales tax.
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Sales Tax Exemption
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Every jurisdiction exempts certain organizations (churches, non-profit organizations, charities) from paying sales tax. Allowable exemptions vary. Qualifying groups must apply for a sales tax exemption certificate. If the buyer claims the exemption, he must provide a copy of the sales tax exemption certificate at the time of payment.
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Uniform Commercial Code
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a set of rules and provisions enacted to simplify and clarify commercial transactions, with uniform laws that govern all jurisdictions. If a transaction involves two or more states or another nation, the provisions of either may be applied as long as all the parties involved agree which code is to be used. Both buyer and seller have certain rights. When a buyer purchases an item, he receives clear title. He accepts in good faith that the seller legally owned the item and had authorization to sell it and transfer ownership. The buyer has the right to take possession according to the terms of the sale. If the buyer refuses to take delivery, fails to make the agreed- upon payment as specified in the terms of the sale, or payment is rejected (insufficient funds, buyer insolvency, etc.), the seller may: cancel the sale; stop delivery; resell the item to recover any monetary loss incurred; demand return of the title and other paperwork provided at the time of the sale.
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Complaint
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a statement made in a civil action; a formal charge, made under oath, about the commission of a crime
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Court Order
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a direction or command given by a court or other adjudicative body that is entered into the record but not necessarily included in the final judgment
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Subpoena
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a written order issued by the court, commanding a person to give testimony
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Testimony
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a spoken or written statement given under oath
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Summons
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a notice instructing a person to appear in court as a defendant, juror or witness
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Discovery
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when used as a legal term means "data or documents that someone involved in a legal action must disclose to another person before or during a proceeding"
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Mediation
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the "attempt to bring about a peaceful settlement between disputing parties through the intervention of a neutral third party"
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Arbitration
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is the legal process used by disputing parties when they "submit their differences to the judgment of an impartial person that has been appointed by mutual consent or statutory provision"
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Budget
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an itemized summary of expenditures for a given period
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Personnel Budget
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is based on headcount. Generally, personnel costs are 60-70% of a budget plan, so headcount must be accurate with all associated costs included.
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Operating Budget
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includes all of the costs associated with running a business. Some are fixed, while some vary from month to month; all costs, however, must be budgeted. Most operating budgets are based on 2-5 years of historical data
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Capital Budget
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allocates funds for large ticket items. Many items considered capital expenses are depreciated on some sort of schedule, e.g. over three, five or seven years. In some cases, the Internal Revenue Service sets the depreciation schedule.
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Business Continuity Planning
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A business continuity manual is a comprehensive, realistic, easy-to-use, written document that contains all the critical information needed in the event of disruption in operations (Natural or man-made disaster). It addresses conditions before, during and after the event. For each risk, the manual outlines who and what may be affected, how long the event might last, and describes the best response, while acknowledging it is impossible to address every conceivable scenario. Lists the names, addresses and contact numbers of all key staff members, and any applicable government regulatory reporting requirements with contact names and numbers. A copy of the manual should be stored off-site.
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Leader
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Qualities such as integrity, honesty, humility, commitment, passion, wisdom and sensitivity, which are present in good leaders, are part of the person's character. Leadership is more about behavior than a specific skill set. Skills such as decision-making, listening, communicating and motivating are important, but can be learned and honed on the job.
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Jack Welch, businessman, writer and former CEO, proposed these fundamental leadership principles:
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•There is only one way - the straight way. •Be open to the best everyone has to offer. •Make sure the right people are in the right jobs. •Develop an informal environment. •Make sure everyone knows they count. •The true test of self-confidence is the courage to be open. •Business has to be fun. •Never underestimate the other guy. •Understand where real value is added and put the best people there. •Know when to meddle and when to let go.
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International business ethics
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•A search for accepted universal values. •Comparison of business traditions in different countries and cultures. •How religious perspectives affect commerce. •Globalization and cultural imperialism. •Varying standards, e.g. child labor, living wages, etc. •Multinational groups outsourcing to take advantage of varying standards. •Conducting business with rogue governments.
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The EIN can be obtained: A. By appointment B. By snail mail C. At City Hall D. All of the above
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B. By snail mail
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Characteristics of an independent contractor include: A. Works on his employer's schedule B. Uses company equipment C. Pays his own federal and state taxes D. Receives benefits from the employer
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C. Pays his own federal and state taxes
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Organizations exempt from paying sales tax include: A. Hospitals B. Non-profit groups C. Book stores D. All of the above
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B. Non-profit groups
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According to the Uniform Commercial Code, when can a seller cancel a sale? A. Buyer refused delivery of the item B. After one week C. In bad weather D. Seller changes his mind
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A. Buyer refused delivery of the item
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A purpose of communication is to: A. Make money B. Pass the time C. Make noise D. Give advice
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D. Give advice
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Legal terms include: A. Formulate B. Correlation C. Discovery D. Insinuate
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C. Discovery
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A budget determines: A. Funds availability B. Needed materials C. Interest in expanding D. All of the above
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A. Funds availability
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A business continuity manual should: A. Avoid addressing conditions before an event B. Discuss every possible scenario C. Describe best responses D. List locations
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C. Describe best responses
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Qualities found in a good leader include: A. Energetic B. Easy going C. Curiosity D. Sensitivity
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D. Sensitivity
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International business ethics is affected by: A. Cultural traditions B. Student organizations C. Productivity D. Distance
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A. Cultural traditions
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Net Exporter
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The value of the goods that a country exports exceeds the value of the goods that it imports. Net exporters have positive trade balances, meaning that the value of the goods that they sell to other countries exceeds the value of the goods that they buy from other countries.
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If a government implements a tariff on imported consumer goods, it is most likely trying to:
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Protect its domestic consumer good from foreign competition. By increasing tariffs, the government will increase the domestic prices for foreign-made consumer goods, thus making domestically-produced products more attractive to consumers and reducing the overall level of competition in the industry.
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The objectives or goals of financial management are to maximize: a. Sales b. Profits c. Owner's Wealth d. Total Assets
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c. Owner's Wealth
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The two basic types of stocks are: a. Class A and Class B b. Class A Common and Class B Common c. Convertible and Common d. Common and Preferred
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d. Common and Preferred
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If you borrow $500 for one year and agree to repay the lender $540 at the end of one year, the interest cost of borrowing is: a. 8% per year b. $40 c. neither (a) nor (b) d. both (a) and (b)
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b. $40
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Using the net present value method, the decision to accept an "accept-reject" investment proposal would occur when the net present value is a. greater than or equal to zero b. less than or equal to zero c. equal to zero d. less than zero
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a. greater than or equal to zero
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A short-term unsecured promissory note issued by a corporation with a high credit standing is called a a. money market mutual fund b. commercial paper c. repurchase agreement d. negotiable certificate of deposit
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b. commercial paper
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The major financial assets of a firm do NOT include: a. Turnover Ratios b. Liquidity Ratios c. Accrued Ratios d. Profitability Ratios
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c. Accrued Ratios
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As the interest rate goes up, the present value of a future amount will: a. go up b. go down c. remain the same d. fluctuate
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b. go down
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If a firm undertakes all worthwhile projects and pays out dividends when and only when funds are available, it follows the: a. asymmetric dividend theory b. dividend signaling hypothesis c. impairment of capital theory d. residual theory of dividends
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d. residual theory of dividends
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A reasonable short-term financial decision for a multinational company that expects a local foreign currency to appreciate is to: a. increase local accounts receivable and decrease local accounts payable b. increase both local inventories and local notes payable c. increase both local customers accounts receivable and local notes payable d. decrease both local notes receivable and accruals
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a. increase local accounts receivable and decrease local accounts payable
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If the cash discount period is increased, the firms investment in accounts receivable due to discount takers still getting cash discounts but paying later is expected to: a. Increase b. Remain Unchanged c. Decrease d. Change, but the direction of change cannot be determined
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a. Increase
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A bond that has a yield to maturity of 14% and a current yield of 8% a. sells at a premium b. sells at par c. has a coupon rate in excess of the market rate of interest d. has a coupon rate less than the market rate of interest
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d. has a coupon rate less than the market rate of interest
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The manipulation of taxes and government spending by Congress for the purpose of altering real national output and employment, controlling inflation and stimulating economic growth is known as which of the following? A. Discretionary Fiscal Policy B. Balancing the Budget C. Contractionary Fiscal Policy D. Expansionary Fiscal Policy
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A. Discretionary Fiscal Policy
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Of the following, which is a questioning clue word MOST likely associated with the "analysis" higher order thinking skill of Bloom's Taxonomy? A.Name B. Reconstruct C. In What Ways D. Arrange
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D. Arrange
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Once a decision of the court has become final, it is said to be: A. res ipsa loquitur B. res judicata C. a directed verdict D. none of the above
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B. res judicata
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Which of the following is a NOT disadvantage of the entrepreneurial specialty skill niche? A. Those in the specialty skill niche look only directly ahead at their narrow specialized field, thereby creating "tunnel vision." B. Those in the specialty skill niche in the early stages must search for the specialty skill opportunity with time to develop the skill. C. Those in the specialty skill niche are usually dependent on somebody else to bring the product or service to market. D. The specialty skill niche may become commonplace and universal.
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B. Those in the specialty skill niche in the early stages must search for the specialty skill opportunity with time to develop the skill.
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Which of the following types of organization divides the units so that each has a dissimilar set of duties and responsibilities? A. territorial organization B. client-centered organization C. functional organization D. product organization
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C. functional organization
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Hardware or software that prevents unauthorized users from accessing a network is known as which of the following? A. Drywall B. Information Security C. Antivirus D. Firewall
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D. Firewall
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A debt instrument with 5 - 10 years to maturity is considered which of the following? A. intermediate-term B. Long-Term C. Short-Term D. Balloon Payment Loan
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A. intermediate-term -An intermediate-term loan is a debt instrument with 5 - 10 years to maturity. It appears as a long-term debt on the balance sheet since it matures in over one year but it matures quicker than long-term debt.
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Which of the following is an example of a formal research method? A. Informal Survey B. Scientific Experiment C. Talk with Employer D. Interview Audience
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B. Scientific Experiment -Papers and reports need to be carefully researched. This can include formal and informal research. A scientific experiment is formal research. The other answers are informal research.
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A report, such as sales report that keeps track of what an individual is doing, is which of the following types of reports? A. Operating Report B. Plan C. Personal Activity Report D. Budget
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C. Personal Activity Report -helps management track what individuals are doing. Sales reports are an example of this type of report. Other examples are: expense reports, conference reports and performance reviews.
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FASB
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Financial Accounting Standards Board develops the rules that form the foundation of financial reporting. Private sector group.
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LASB
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The International Accounting Standards board. The global counterpart to the FASB.
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GAAP
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Generally Accepted Accounting Principles.
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IFRS
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International Financial Reporting Standards. Global generally accepted accounting principles.
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Managerial Accounting
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Used for business planning, controlling, decision making. Targeted toward specific needs of management.
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Fair Value
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Accounts based upon subjective Assessments of current worth.
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Historical Cost Principle
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Transactions and events are measured and reported at acquisition cost.
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CPA
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Certified Public Accountant
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Assets
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Are the economic resources of the entity, and include such items as cash, accounts receivable (amounts owed to a firm by its customers), inventories, land, buildings, equipment, and even intangible assets like patents and other legal rights. Assets entail probable future economic benefits to the owner.
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Liabilities
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are amounts owed to others relating to loans, extensions of credit, and other obligations arising in the course of business. Implicit to the notion of a liability is the idea of an "existing" obligation to pay or perform some duty.
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Owners' Equity
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is the owner "interest" in the business. It is sometimes called net assets, because it is equivalent to assets minus liabilities for a particular business. Who are the "owners?" The answer to this question depends on the legal form of the entity; examples of entity types include sole proprietorships, partnerships, and corporations.
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Revenue
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is the enhancement resulting from providing goods or services to customers. Revenue will contribute to income, and income is added to retained earnings. Gains.
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Expenses
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Costs incurred in producing revenues. Expenses can generally be regarded as costs of doing business. Revenue is the "top line" amount corresponding to the total benefits generated from business activity. Income is the "bottom line" amount that results after deducting expenses from revenue. Losses.
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D-i-E-A-D
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debits increase expenses, assets (accounts receivable), and dividends
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C-d-E-A-D
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credits decrease expenses, assets (accounts receivable), and dividends
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C-i-L-R-E
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Credits increase liabilities (accounts payable), revenues, and equity.
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D-d-L-R-E
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Debits decrease liabilities (accounts payable), revenues, and equity.
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Depreciation
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Long-lived assets like buildings and equipment will provide productive benefits to a number of periods. Thus, a portion of their cost is allocated to each period. Can be calculated using the straight-line method, where an equal amount of asset cost is assigned to each year of service life. If a $150,000 truck with a 3-year life was purchased on January 1 of Year 1, depreciation expense would be $50,000 per year ($150,000/3 = $50,000). This expense would be reported on each year's income statement. The annual entry involves a debit to Depreciation Expense and a credit to Accumulated Depreciation (rather than crediting the asset account directly):
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Unearned Revenue
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Often, a business will collect monies in advance of providing goods or services. Such payments received in advance are initially recorded as a debit to Cash and a credit to unearned Revenue. Unearned revenue is reported as a liability, reflecting the company's obligation to deliver product in the future. Remember, revenue cannot be recognized in the income statement until the earnings process is complete. As goods and services are delivered, the unearned Revenue is reduced (debited) and Revenue is increased (credited). The balance sheet at the end of an accounting period would include the remaining unearned revenue for those goods and services not yet delivered.
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Accruals
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Another type of adjusting journal entry pertains to the accrual of unrecorded expenses and revenues. Accruals are expenses and revenues that gradually accumulate throughout an accounting period. Accrued expenses relate to such things as salaries, interest, rent, utilities, and so forth. Accrued revenues might relate to such events as client services that are based on hours worked.
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Economic Theories
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Broadly fall under two categories: microeconomics and macroeconomics.
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Microeconomics
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deals with the economy at a smaller level or at a smaller scale, such as the market for a particular product (e.g., automobiles) or the behavior of an individual firm in a particular industry (e.g., decisions made by one of the Big Three in the U.S. automobile industry).
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Contractionary Fiscal Policy
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is a government policy of reducing spending and raising taxes. In the language of some first courses in macroneconomics, it shifts the IS curve (investment/saving curve) to the left.
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Discretionary Fiscal Policy
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Discretionary fiscal policy is the deliberate manipulation of taxes and government spending by Congress for the purpose of altering real national output and employment, controlling inflation and stimulating economic growth. It is a fiscal policy achieved through government intervention, as opposed to automatic stabilizers.
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Expansionary Fiscal Policy
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A macroeconomic policy that seeks to expand the money supply to encourage economic growth or combat inflation (price increases). One form of expansionary policy is fiscal policy, which comes in the form of tax cuts, rebates and increased government spending. Expansionary policies can also come from central banks, which focus on increasing the money supply in the economy.
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Profit Maximization Principle
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The firm will stop production at the level where marginal revenue equals marginal cost.
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Marginal Revenue
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The revenue that the sale of an additional unit generates.
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Marginal Cost
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the cost of producing an additional unit of the product under consideration.
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Economies of Scale
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Economies of scale in production imply that as the level of production rises the cost per unit of product falls from the use of any plant (generally, up to a point).
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Macroeconomics
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studies the behavior of the overall economy (e.g., the U.S. economy as a whole), although it sometimes also looks at economies of different regions that comprise the overall economy.
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CPI
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Consumer price index, measures the average retail prices paid by consumers for goods and services typically bought by them.
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PPI
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Producer Price Index, which measures the wholesale prices of items that are typically used by producers.
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GDP
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Price deflator, which measures the prices of all goods and services included in the GDP.
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Laissez-Faire
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Economic environment in which transactions between private parties are free from government restrictions, tariffs, and subsidies, with only enough regulations to protect property rights.
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Interest Rate
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is invariably quoted in nominal terms—i.e., the rate is not adjusted for inflation. Thus, the commonly followed interest rate is actually the nominal interest rate. Nevertheless there are hundreds of nominal interest rates.
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Wants Versus Needs
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Wants: Toys, Entertainment, Jewelry Need: Food, Clothing, Shelter
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Economic Roles
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1. Analyze the current condition of the economy 2. Predict crisis 3. Factors that fix crisis
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Types of Economic Resources
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Four types Labor, land, capital, entrepreneurial. Economic resources are the assets (things of value) which an economy (or business) may have available to supply and produce goods and services to meet the ever-changing needs and wants of individuals (in the case of a business) and society (in the case of society as a whole.).
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Understands the role of money in the U.S. economy
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-The Composition of the Money Supply -The Relationship Between Interest Rates and The Quantity of Money Required and Available in Money Markets -The Operation and Role of the Federal Reserve Bank -Global Markets
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Price Elasticity
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Relationship between the total amounts spent on a good in the market and the price of the good. It is the percentage change in quantity divided by the percentage change in price. If a price decrease results in larger total expenditure (and vice versa), the good is price elastic. If a price decrease results in less total expenditure (or vice versa), the good is price inelastic.
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Procedures for Personal Financial Management
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-Planning a Budget -Saving Money -Reconciling Bank Statements -Planning Investments
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Understands consumer financial issues
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-Making Major Buying Decisions -Comparative Shopping -Purchasing Insurance -Acquiring Personal Property
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Consumer Credit
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A debt that someone incurs for the purpose of purchasing a good or service. This includes purchases made on credit cards, lines of credit and some loans.
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Short-Term Loans
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made to enable people to purchase goods or services primarily for personal, family, or household purposes.
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Revolving Credit
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is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Credit cards are an example of revolving credit used by consumers.
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Installment Credit
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involves credit that is repaid by the borrower in several periodic payments.
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Non-Installment Credit
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loans repaid in one lump sum.
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Issues related to consumer credit
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-Costs of various forms of credit: you need to know the annual percentage rate and how the interest is being calculated. -Procedures and qualifications for obtaining credit: When a consumer makes an application for credit, the creditor must decide whether he or she is a good risk. Most creditors regularly order a credit report on an applicant rather than undertake a costly investigation on their own. Files are retained by two types of credit agencies.
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ECOA
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Equal Credit Opportunity Act, prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance. Creditors may ask you for most of this information in certain situations, but they may not use it when deciding whether to give you credit or when setting the terms of your credit. Not everyone who applies for credit gets it or gets the same terms: Factors like income, expenses, debts, and credit history are among the considerations lenders use to determine your creditworthiness.
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Functional Organization
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The classic organizational structure where the employees are grouped hierarchically, managed through clear lines of authority, and report ultimately to one top person. By orienting people toward a special activity, functional organization concentrates competence in particularly effective ways. Units are divided so that each has a dissimilar set of duties and responsibilities. However, functional organization tends to deemphasize interdepartmental cooperation and could create boundaries between departments.
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Product Organization
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Companies with multiple product lines or specific retail divisions can benefit from a product-style organizational structure. This allows the company to create a tall structure divided by product type or style. Each division has its own internal departments and operates like a mini-business.
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Entrepreneurial Skills
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-Personal Skills -Communication Skills -Negotiation Skills -Leadership Skills -Sales Skills
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Understands the changing nature of business
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-Technological Changes -Cultural Diversity -Global Resources -Competition
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Applies the various functions of management
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-Planning -Organizing -Leading -Controlling
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Complaint
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a statement made in a civil action; a formal charge, made under oath, about the commission of a crime
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Court Order
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a direction or command given by a court or other adjudicative body that is entered into the record but not necessarily included in the final judgment
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Subpoena
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a written order issued by the court, commanding a person to give testimony
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Testimony
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a spoken or written statement given under oath
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Summons
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a notice instructing a person to appear in court as a defendant, juror or witness
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Discovery
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when used as a legal term means "data or documents that someone involved in a legal action must disclose to another person before or during a proceeding"
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Mediation
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the "attempt to bring about a peaceful settlement between disputing parties through the intervention of a neutral third party"
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Arbitration
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is the legal process used by disputing parties when they "submit their differences to the judgment of an impartial person that has been appointed by mutual consent or statutory provision"
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Understands multicultural business opportunities and competitive factors that affect the international business environment
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-Social -Cultural -Political -Legal -Geographic -Economic
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Positive work habits and skills for achieving success in the workplace:
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-Dependability -Professional appearance -Accuracy -Honesty -Initiative -Time management -Decision making -Problem solving -Prioritizing tasks
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Procedures for carrying out administrative support responsibilities:
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-Scheduling -Meeting -Planning -Organization
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Procedures and systems for managing information:
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-Document storage and retrieval -Supply inventories -Purchasing schedules -Inventory record keeping -Maintenance -Repair schedules
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Law of Demand
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A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa.
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Equal Employment Opportunity Act
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The Equal Employment Opportunity Act of 1972 (Public Law 92-261) instituted the federal Equal Employment Opportunity program, which is designed to ensure fair treatment to all segments of society without regard to race, religion, color, national origin, or sex. The goal of this law and program is to make discrimination in employment illegal.
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Americans with Disabilities Act
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The Americans with Disabilities Act (ADA) gives civil rights protections to individuals with disabilities that are like those provided to individuals on the basis of race, sex, national origin, and religion. It guarantees equal opportunity for individuals with disabilities in employment, public accommodations, transportation, State and local government services, and telecommunications.
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Tariff
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A tariff is either (1) a tax on imports or exports (an international trade tariff), or (2) a list of prices for such things as rail service, bus routes, and electrical usage (electrical tariff, etc.)
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LAN
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Local Area Network, is a computer network that interconnects computers in a limited area such as a home, school, computer laboratory, or office building using network media.
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WAN
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Wide Area Network, spans a large geographic area, such as a state, province or country. WANs often connect multiple smaller networks, such as local area networks (LANs) or metro area networks (MANs). The world's most popular WAN is the Internet. Some segments of the Internet, like VPN-based extranets, are also WANs in themselves. Finally, many WANs are corporate or research networks that utilize leased lines.
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The Internet
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is a global system of interconnected computer networks that use the standard Internet protocol suite (TCP/IP) to serve several billion users worldwide. It is a network of networks that consists of millions of private, public, academic, business, and government networks, of local to global scope, that are linked by a broad array of electronic, wireless and optical networking technologies.
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Peer to Peer
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P2P, computing or networking is a distributed application architecture that partitions tasks or work loads between peers. Peers are equally privileged, equipotent participants in the application. They are said to form a peer-to-peer network of nodes.
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Client/Server
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is a distributed application structure in computing that partitions tasks or workloads between the providers of a resource or service, called servers, and service requesters, called clients. Often clients and servers communicate over a computer network on separate hardware, but both client and server may reside in the same system.
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Simple Interest
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Simple interest is calculated only on the beginning principal. For instance, if one were to receive 5% interest on a beginning value of $100, the first year interest would be $5. They would then continue to receive 5% interest on the original $100 amount, over five years the growth of the original investment.
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Compound Interest
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interest is calculated not only on the beginning interest, but on any interest accumulated in the meantime. For instance, if one were to receive 5% compound interest on a beginning value of $100, the first year interest would be the same as simple interest on the $100, or $5. The second year, though, interest would be calculated on the beginning amount of year 2, which would be $105.
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Annuity:
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Equal Annual Series of Cash Flows Year 1: $100 deposited at end of year= $100.00 Year 2: $100 × .05 = $5.00 + $100 + $100= $205.00 Year 3: $205 × .05 = $10.25 + $205 + $100= $315.25
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Ordinary Annuity:
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Payments are required at the end of each period. For example, straight bonds usually pay coupon payments at the end of every six months until the bond's maturity date.
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Annuity Due:
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Payments are required at the beginning of each period. Rent is an example of annuity due. You are usually required to pay rent when you first move in at the beginning of the month, and then on the first of each month thereafter.
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Perpetuity
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is a cash flow without a fixed time horizon. For example, if someone were promised that they would receive a cash flow of $400 per year until they died, that would be a perpetuity. To find the present value of a perpetuity, simply take the annual return in dollars and divide it by the appropriate discount rate.
